gold $3620 ag $125, page-13

Being the start of a new year, it's perhaps a good time to make a few predictions or guesstimates as to what the FML development programme might be, and what the future might look like. I know that some people have a rather gloomy outlook on FML, but I have a much more optimistic view of the company's future, and I believe that the Australian shareholders will continue to have a stake in the company's long-term future.

It's likely that the Board have already developed a broad plan for the company's expansion, and for making the best use of the recent substantial cash injection. There are probably individuals or small sub-committees already charged with responsibility for developing detailed plans for the various activities which together will form the broad plan, such as exploration, procurement and deployment of drilling rigs, mill refurbishment and expansion, personnel recruitment, equipment procurement (largely through Shandong?), mergers and acquisitions, etcetera.

It seems likely that they will go for a share consolidation this year of one new share for every thirty existing shares, which at an SP of 3.1 cents would give a notional value of 93 cents for the new shares.

I wouldn't be surprised to see some free options issued at the same time as the consolidation, with maybe one free option for each ten new shares held, and with an exercise price of maybe $1.20, exercisable by perhaps December 2015, by which time the options should be well and truly in the money.

My crystal ball predicts that within three years, FML will have three mining and production hubs in Western Australia, and that they will be on the verge of opening a new mining and production hub interstate, probably in the Northern Territory or South Australia. The exercising of the free options will provide additional capital to assist with the costs of the interstate expansion.

There have been some significant finds of gold and other metals in the NT and SA, with the promise of much more to come, but with the financing constraints already being experienced by exploration companies likely to worsen, it will probably be companies with cash reserves and an existing production income stream which will take over and profit from those finds.

FML will be in the box seat to take advantage of acquisitions which can be incorporated into any of their existing or planned production hubs in WA, and to acquire projects which can be consolidated into a new production hub interstate.

I'm one of the shareholders who was very keen for the Shandong deal to go through, and I'm quietly confident that the benefits of the deal will start to manifest themselves in the not too distant future.

Whatever your views of the future might be, I wish you a very happy and successful 2013.

Cheers,
Mike